The Blubber

JPMorgan Chase (JPM) CEO Jamie Dimon said a U.S. recession is a "likely outcome" amid the upheaval sparked by President Trump's tariffs, warning that negative market reactions to trade policy "could worsen if we don't make some progress."

The head of America’s largest bank went further than he did in his annual shareholder letter on Monday, where he had stopped short of predicting a recession, though he acknowledged that tariffs could cause short-term inflation and slower economic growth.

Appearing Wednesday on Fox Business Network’s "Mornings with Maria," Dimon was asked directly if he expected a recession. "I am going to defer to my company, but I think probably that's a likely outcome," he said.

Jamie Dimon, CEO of JPMorgan Chase, at the U.S. Capitol after a meeting with Senate Republicans on debanking issues, February 13, 2025. (Tom Williams/CQ-Roll Call, Inc via Getty Images)

JPMorgan’s chief U.S. economist, Michael Feroli, last week became the first major Wall Street analyst to officially forecast a 2025 recession, citing "the weight of the tariffs" as a key driver.

Dimon also touched on broader impacts from the growing market turmoil, such as rising stress among bank borrowers. When asked whether defaults were increasing, Dimon said, "Not yet, but I expect them."

"If rates are ticking up, inflation remains sticky, and credit spreads are widening — which they are — I think we’ll see more credit problems than we've seen in a long time," he added.

More insight into how JPMorgan is weathering the environment could come Friday, when the bank reports its first-quarter earnings.

Signs of strain across Wall Street have been piling up. Initial public offerings and mergers have been sidelined. Leveraged loan deals have stalled. Bond issuances have been paused.

Meanwhile, U.S. Treasury yields have spiked this week — a trend Treasury Secretary Scott Bessent attributed to "some very large leveraged players" suffering losses, though he said it was “nothing systemic.”

Bessent, also speaking on "Mornings with Maria," described the turbulence in the bond market as "one of those de-leveraging convulsions" that occur from time to time, adding, "I believe there is nothing systemic about this."

"I think it’s an uncomfortable but normal de-leveraging happening in the bond market," he said.